This is a version of an article submitted to Pharmaceutical Marketing this week. Having been delightfully asked by the guys at PM for a thought piece on the future of agencies. Post submission – I find myself being all a little A-level, that feeling when you have just submitted an essay and you wait eagerly for a C+. Anyway have a look at it early;
“My approach to this article is symbolic of much of the way client service business has evolved. Life’s got full on, busy, juggling drive and discussion. I am desperately keen not to write a piece that’s another repetition – you know the world according to X approach, beginning with a story about how a pause for thought has been remarkable, leading to a ‘cut and paste’ about globalisation, silos and some boxes and arrows. To deviate from this course seems quite risky and frankly I don’t want to seem an idiot in front of you. I don’t want to be the “you’re that guy, the idiot from hive”. My task is to secure succinct biting observation that truly connects. A couple of scene setters firstly, I have never written a thought piece for a magazine before and only have 6 hours until flight BA185 lands in New Jersey and I have to file this copy. This pressurised environment is further aided when the small world we work in came crashing down on me. Either side of me on this luckiest of flights are two potential clients. Both of whom I know, and each one is dead keen to read and review this as it’s written. It’s being termed ‘helping out’.
“The traditional role of sage, always ends in a stuffing” is a phrase I wish my mother said, unfortunately she is from New Maldon so rarely quotable. With this in mind I imagine you having read loads of these. I imagine you’re sitting there, laptop and docking station, lanyard, and mock-ups scattered round a cubicle. Cesar like, thumb ready to be down-ended, at the faintest sign of a hastily written article.
Anyway I have hundreds of words to write all from 10F and two eager editors either side of me. How should the agency evolve?
The death of the silo
It’s in no doubt that times have changed massively. I have been lucky enough to work across all the usual silos in both big and small agencies. I cannot help but think that we all in healthcare have supported and perpetrated a myth. From the agency side the silo simply doesn’t exist in the way many would have you believe. Whether by audience or discipline, the uniqueness and homogenous nature of advertising, medical education, PR is a fallacy. All agencies cross each other when it comes to many of the core activities required by a modern client. I am not talking about getting an ad man to run an advisory board or the PR lead to come up with an ad concept, but in the more grey activities. The communications business has diversified massively since the 1950s and continues to do so. Next time you have an all agency meeting ask who should be best placed to do the patient pack or a speaker meeting direct mailer. Or if you are having a particularly tough day wave the budget busting 100 page monograph artwork and watch the solid nature of silos in action as all clamber for this margin busting cherry of a project. The plain fact is that our silos are converging, with a few distinct specialized projects owned by a specific silo. This post silo confusion where all expect to be able to do everything should be a pretty rough time for all. Perhaps we all can expect to merge – becoming healthcare communications agencies. Masters of nothing; all offering the same menu of services, competing on price. The onus is on us to realise this and find ways of driving differentiation between us.
The monograph meeting game leads nicely to the need for agencies to understand our businesses better. We in the past have not been very good at it. The rise of procurement and what seems like a new breed of operations director has been brilliant at forcing us to know where we make our money, to transparently cost our business and move away from licked finger and prevailing wind estimations. This is still forcing many to a new sense of honesty to what the business actually is. Our margin should be delivered through selling time, whether that be for thinking, doing or managing processes. Procurement have rightly prevented us from becoming shopkeepers and marking up pass through costs, but still loads needs to be done to professionalise our sources of income. Artwork is now a commoditised service, and for many a great source of income, with some agencies deriving as much as 50% of their margin from this. Is that really right? An output that’s so vulnerable being so crucial? It makes you worry for the business. It’s time for agencies to start transparently outsourcing artwork, operating tiered costing models and developing capabilities across the world to reduce down these costs. Enabling clients to do more, with the same budgets and get the value they demand.
Agencies are a diverse bunch ranging from the enveloping borg of the networks to the boutique creative shops. The need to reengineer the model that we all have grown used to is dead clear. Pyramid shaped agencies that are run by few, with masses of junior implementers have to evolve. Agencies that specialise in knowing audiences need to listen to their clients more. Time and time again we hear from agency changers that they need senior people day to day. Implementation is a given, (you get fired for screwing it up, but not hired for it) but strategic support and decision making mid implementation can no longer be considered second class to the yearly brand plan day. It’s a pretty straightforward conclusion that if you consider strategy mobile, and it needing to evolve alongside the environment then partners to this evolution need to be present, to support and evolve in real time. The big kids are needed on, and not just in the business. The current agency approach most adopt drives the best strategists and most senior talent up and inward looking, spending an increasing amount of time managing the business. Reporting up to the holding company, sorting out operations, succession planning, staff development all moving the most valuable players away from the coal face.
Loads of other industries face this challenge. When you describe the typical agency approach to a partner at a law firm they laugh at you, and rightly so. In the legal world partners are the blood of the business and kept freed up to face clients and drive value 90% of their time. These partners are supported by teams but lead the relationship. Learning is done internally, the machine is set up to front the most valuable, look after the rising stars and discard those who are not going to make this grade. Its food for thought perhaps that there are no B teams amongst the big 5.
The rise of digital has been the cause for dozens of slides delivered to loads of marketeers. Web 2.0, augmented reality, avatars, virtual this and that, ad infinitum. Our digital world and the increasing sophistication of our audiences will force agencies to start to consider digital not as a channel or (at its very worse) a production function, but as glue for everything we deliver. Consumer closeness, tracking and ROI all are facilitated by this rush for 0s and 1s. But we need platforms and integration not things. Those agencies that are going to be mega are going to be the ones who see digital for what it is – a seamless place to embed all activities and facilitate community. The world of digital is moving so fast that risk is inherent in its delivery, as producers of digital the risk must start to be taken in house at agencies. It’s the agencies job to push the boundaries not just borrow what Skittles are doing. Next time you see a presentation touting channel genius ask the biggie question of your crew in this storm; “In this ever changing world of digital innovation how much do you spend on R&D?” If the answer is nothing then you are already behind. Your agency should be sharing risk to deliver their margin and your ROI.
Increasingly our clients are alone. Head count pressure and the change to the model all have produced a new type of brand leader. Too often under huge pressure, under supported and at risk. The clients we know and love are the ones that know this and want not just stuff done but help and partnership. As the need to differentiate brands theoretically grows we will find that so will the ways we understand problems, and develop solutions. Move away from off the shelf solutions forces agencies to change and be more open, not have all the solutions, and be happy to open up their teams to work alongside clients to understand and co-create. This is a big ask for an industry that often has pretended that their ideation process is a black box of inspiration and genius – rather that good people slogging hard, and building and idea from humble beginnings. This is so true with more complex projects that result from pseudo briefings, and client/agency development teams working on prototypes for testing with audiences.
I am sure much of the above has been expected. It seems really clear that we need to evolve our model, man up in terms of transparency and define what business we are in. Most importantly for me is that I see great clients, good agency talent striving to do good work, often despite the model they work in. For me the ultimate aim is for agencies to be seen as Trusted Partners, on the inside, rather than service providers on the out. Anything that gets in the way of this simple aim should either be questioned or set alight.
With 20 minutes to land and for the skippers amongst you. In a small bag of macadamia nuts the future of agencies is as the follows; create your own silo, move the pyramid to an hour glass, insist on working with clients not for them, put you best front of house and keep them, fire your B team, jettison the commoditised business, show all how you make your money and be prepared for co-creativity.”
Fingers crossed it gets published.